The sharing economy.
Some consider it destructive, while others see it as the best form of an economy the modern world could ask for. Whatever the view, the sharing economy is here to stay, and it’s best if we as a society familiarize ourselves with the concept.
The sharing economy is by definition an economic system established on the society’s progress into using technological services, led by venture-capital-fed firms such as Uber and TaskRabbit.
(Image Source: Emergent Media and Markets)
The term has often been criticized for its oxymoronic nature: when sharing has a monetary objective — such is the case with companies like Uber that connect consumers with drivers — it no longer is defined as sharing, making the definition truly counter-intuitive. Nevertheless, the modern world has seen the benefits of these tech-based companies by faster, cheaper and more convenient services. Higher levels of productivity have created jobs, schedules for which can be managed by the drivers themselves, and for many Torontonians, salvaged them from grave financial debts. Yet, the independent nature of companies like Uber remain at the very heart of why their regulation is integral for riders, drivers and their direct competitors.
Perhaps the most pressing issue within the sharing economy is the insurance gap, consequences for which riders and the public have to endure. In British Columbia, the illegal operations of Uber have caused the company’s drivers to not have the proper accidence coverage. Law requires drivers to declare to their respective insurance company if passengers are being driven around for hire with their car. In many areas with deregulated Uber operations, these insurance policies are not nearly enforced as they should be. The ability of service sharing companies to avoid safety standard and still operate within communities not only gives them an unfair advantage over traditional industries but also risks the health of both riders and drivers.
Users of Uber in a city where the service operates illegally often go unaware of the insurance risks involved with their ride. If the driver undergoes a car accident, the casualties and problems have to be entirely resolved by the individual as Uber aims to claim as little responsibility for mishaps as possible. This leaves both the public and the driver exposed to health risks, and lack of governmental policies bars further proliferation of the service.
(Image Source: Kolesa)
For many traditional taxi industries, Uber is the most profound, direct competition that they have had to face for years. In any economic system, this competition is seen as an asset: a way to increase efficiency, provide better customer services and drive down prices. Nevertheless, the services provided by many companies in the sharing economy go untaxed, especially when operated illegally and left unregulated. They tilt the playing field in their favour, considering their direct competitors do not benefit from the same unbound taxation policies. This government inaction will ultimately result in a reduction in economic growth and revenue losses.
Jobs within the sharing economy provide a unique independence for the workers. Uber drivers have the advantage of managing their own working shifts, scheduling their time to manage between their family and other part-time jobs. This self-supervised system has hence created a labour market that is not only volatile and in constant change, but the duration of jobs have become much shorter as well. For many, loyalty has become a dead concept in the sharing economy, where workers and companies only look out for their personal best interest and become isolated into separate economic bubbles. Without government regulations to secure job statuses for service providers in the era of uberization, much of the labour sector would be left in ambiguity and in the psychological uncertainty of their jobs.
(Image Source: The RSA)
Noting the unregulated status of the sharing economy, it is challenging to gather valid data, yet projections estimate that our world’s transition into a new era of peer-to-peer companies has the potential to drastically increase global revenues.
Government regulations, however, lie at the core of further advancement of these services. Job safety and public insurance are a growing concern for consumers of the modern sharing services. As the younger generation becomes more habituated to a sharing economy — a fast and cheap system of providing and gaining access to services — the government will have to revise major industrial policies and hold tighter regulations to ensure job stability in the labour market and public safety. Technological advancements are growing and diversifying exponentially, and government regulations must evolve to catch up with the transformation of the public’s ideologies and values.